HMLS bunding multiple small loans into one?

[Sean Dezoysa]

Saw this posted earlier:

Quote from @Jason Hirko:

@Keenon A Trevor
Most HMLs won't do loans under $50k as you mentioned... HOWEVER since
you have multiple sub $50k properties, many HMLs will bundle them into
the same loan. They get a reasonable sized loan and you get your
properties financed. Try asking a few local lenders about that.

I have two properties I'm looking to flip, both under $50k, but together closer to $80k. I wanted to ask how one loan on two properties would work. Do I need to have the COE dates adjusted to the same day? If not how much of a gap between COE dates becomes an issue when bundling a loan over two different properties?

[Sanat Bhandari]

@Sean Dezoysa What you're describing is called a blanket loan. One loan for multiple properties can be a good strategy depending on the underlying assets but be careful regarding the loan pay down clause in the loan docs 

Generally, if you want to sell one property in a blanket loan, most lenders ask for a 20% premium on top of the collateralized amount to remove that property from the loan. For this reason alone, blanket loans make sense when there's a substantial amount of smaller assets involved (like a portfolio of SFH's or townhomes for example). There's some more quirks to blanket loans (higher fees, appraisal costs, etc) but I'll leave those out for the sake of brevity

As for COE, I believe those dates would have to be adjusted to the same day for closing but I'll let a title expert chime in on this answer